VAT fraudsters get lengthy jail sentences

Sars fraud investigators established that the VAT auditor enabled the fraud by releasing substantial VAT refunds after she ostensibly audited VAT201s submitted by Kriek on behalf of vendors. File Photo: IOL

CAPE TOWN – A prominent Western Cape man and an East Rand bogus tax practitioner who participated in a scam defrauding the SA Revenue Service (Sars) of R32 million, were sentenced to a combined 26 years direct imprisonment last week.

Cornelius Johannes Kriek (42) from the East Rand pleaded guilty to 29 fraud charges, 21 money laundering charges, and one charge of corrupting a public official. He was sentenced to 20 years imprisonment in the Specialised Commercial Crime Court in Johannesburg on Tuesday, August 21.

In the Cape Town Magistrate’s Court, on August 23, Thomas Bloemeris (Tommy) Fortuin (66) from Ridgeworth in Bellville, was sentenced to six years direct imprisonment on 236 charges of fraud and forgery relating to the tax affairs of close corporations belonging to members of his family. He pleaded guilty to all the charges put to him in terms of a plea bargain agreement reached with the state.

Magistrate van der Merwe handed down an additional 12 months imprisonment to Fortuin for failure to submit two income tax returns. Three of the six-year imprisonment sentence and the one-year jail sentence for failure to submit outstanding returns were suspended conditionally for five years.

Cornelius Kriek

Kriek presented himself as a bookkeeper to unsuspecting VAT vendors, offering swift and corrective action by submitting VAT201 returns on their behalf. Suspicion was raised by a legitimate tax practitioner who discovered that a large refund had been paid into the account of her former client within a short while after the client had switched his account to Kriek.

Kriek was also sentenced to 84 years imprisonment, suspended wholly, but conditionally for money laundering and ten years imprisonment for corrupting a public official. Five of the 10 years is to be served concurrently with sentences for other charges.

It is alleged that a former Sars employee, previously employed by Sars as a VAT auditor for 35 years, assisted Kriek to commit the fraud. The cases against the two accused were recently separated after Kriek pleaded guilty. The case against the former Sars employee continues on October 23.

Sars fraud investigators established that the VAT auditor enabled the fraud by releasing substantial VAT refunds after she ostensibly audited the respective VAT201s submitted by Kriek on behalf of vendors. The fraudulent refunds were divided between the vendors, Kriek and the Sars employee. A total of 18 companies were involved in the VAT refund scheme, which created an actual loss of just more than R32.9m to the fiscus.

Tommy Fortuin

Two other accused in the Fortuin case were also sentenced.

Fortuin’s son, Tom-Ross Fortuin (35) and the bookkeeper who assisted the family in committing the crimes, Ivor Carlo Carolissen (38), also entered into a plea bargain with the state. They were both sentenced to four years imprisonment suspended for five years, and 18 months Correctional Service, which includes house arrest and community service. Fortuin was found guilty of 79 charges of fraud and uttering and Carolissen for 167 charges of fraud and uttering.

Fortuin (jnr) was ordered to pay Sars back an amount of R615 592, representing the full capital amount of money stolen from Sars through the scams perpetuated by the accused. This money had to be paid in full beforethe sentencing procedure, and has been received by Sars.

He was also sentenced to 12 months, suspended for five years, for failure to submit three Income Tax returns.

The sentences follow an investigation by Sars criminal investigators, which revealed that the convicted individuals submitted fraudulent VAT refund claims to Sars, based on fictitious transactions between the family’s four closed corporations.

Neo Tsholanku, Group Executive: Criminal Investigations welcomed the sentences, saying that Sars is committed and has the depth and tenacity to bring unscrupulous thieves who steal from the fiscus to book. He noted that the sentences also show that the courts are increasingly taking a stance against failure to submit tax returns to Sars.

Tsholanku said the National Prosecuting Authority (NPA) had prosecuted 29 cases since April, maintaining a conviction rate of 97 percent. More than 400 other cases dealing with tax crimes are currently on trial.